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Kirkland's (KIRK) Up 8.6% Since Earnings Report: Can It Continue?
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It has been about a month since the last earnings report for Kirkland's, Inc. (KIRK - Free Report) . Shares have added about 8.6% in that time frame, outperforming the market.
Will the recent positive trend continue leading up to the stock’s next earnings release, or is it due for a pullback? Before we dive into how investors and analysts have reacted as of late, let's take a quick look at the most recent earnings report in order to get a better handle on the important catalysts.
Kirkland's surpassed estimates again in fourth-quarter fiscal 2016, after posting a massive positive surprise of 50% in third-quarter fiscal 2016. The company reported earnings of 83 cents per share that beat the Zacks Consensus Estimate of 80 cents by 3.7%. However, the quarterly earnings of 97 cents per share incurred a year ago were lower by 7.2%.
Quarter in Detail
The home decor retailer’s net sales increased 2.1% year over year to $203.2 million, driven by strong online sales. Weak pre-holiday traffic in December was partially mitigated by strong Black Friday and post-holiday sales.
Categories like seasonal assortment performed decently during the quarter. Sales came almost in line with the Zacks Consensus Estimate during the quarter. Including online sales, comparable store sales declined 4.6% compared with an increase of 1.3% registered in the prior-year period.
Gross profit decreased 1.6% to $79.2 million due to higher cost of sales. Operating income declined 14% $22.9 million owing to lower-store supplies, marketing costs and corporate related expenses.
Kirkland's opened four stores and closed one during the fiscal fourth quarter, taking the total number of stores to 404 at the end of the quarter.
Other Financial Details
The company exited the quarter with cash and cash equivalents of $63.9 million compared with $28.3 million in the previous quarter.
Fiscal 2017 Guidance
Kirkland’s anticipates fiscal 2017 earnings per share in the range of 50–65 cents. The company expects earnings to be lower in the first half of the fiscal year.
The company predicts sales to increase 6–8%. The guidance reflects the additional week in the retail calendar for fiscal 2017. This sales guidance assumes comparable store sales in the range of slightly negative to slightly positive excluding the impact of the additional week of sales.
The company intends to inaugurate 25 to 30 new stores and intends to close 20 stores in fiscal 2017. The company targets to achieve 2–3% square footage during the year.
The company expects to incur capital expenditures of approximately $23 million compared with $27 million in fiscal 2017, primarily driven by new store openings along with continued investments in omni-channel and supply chain initiatives.
How Have Estimates Been Moving Since Then?
It turns out, fresh estimates have trended downward during the past month. There has been one downward revision for the current quarter. In the past month, the consensus estimate also shifted downward by 206.7% due to these changes.
At this time, the Kirkland's stock has a strong Growth Score of 'A', though it is lagging a lot on the momentum front with an 'F'. However, the stock was allocated a grade of 'A' on the value side, putting it in the top quintile for this investment strategy.
Overall, the stock has an aggregate VGM Score of 'A'. If you aren't focused on one strategy, this score is the one you should be interested in.
Zacks' style scores indicate that the company's stock is suitable for value and growth investors.
Outlook
Estimates have been broadly trending downward for the stock. The magnitude of this revision also indicates a downward shift. It's no surprise shares that the stock has a Zacks Rank #4 (Sell). We are expecting a below average return from the stock in the next few months.
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Kirkland's (KIRK) Up 8.6% Since Earnings Report: Can It Continue?
It has been about a month since the last earnings report for Kirkland's, Inc. (KIRK - Free Report) . Shares have added about 8.6% in that time frame, outperforming the market.
Will the recent positive trend continue leading up to the stock’s next earnings release, or is it due for a pullback? Before we dive into how investors and analysts have reacted as of late, let's take a quick look at the most recent earnings report in order to get a better handle on the important catalysts.
Kirkland's Fourth Quarter Earnings Beat Estimates; Gives FY View
Kirkland's surpassed estimates again in fourth-quarter fiscal 2016, after posting a massive positive surprise of 50% in third-quarter fiscal 2016. The company reported earnings of 83 cents per share that beat the Zacks Consensus Estimate of 80 cents by 3.7%. However, the quarterly earnings of 97 cents per share incurred a year ago were lower by 7.2%.
Quarter in Detail
The home decor retailer’s net sales increased 2.1% year over year to $203.2 million, driven by strong online sales. Weak pre-holiday traffic in December was partially mitigated by strong Black Friday and post-holiday sales.
Categories like seasonal assortment performed decently during the quarter. Sales came almost in line with the Zacks Consensus Estimate during the quarter. Including online sales, comparable store sales declined 4.6% compared with an increase of 1.3% registered in the prior-year period.
Gross profit decreased 1.6% to $79.2 million due to higher cost of sales. Operating income declined 14% $22.9 million owing to lower-store supplies, marketing costs and corporate related expenses.
Kirkland's opened four stores and closed one during the fiscal fourth quarter, taking the total number of stores to 404 at the end of the quarter.
Other Financial Details
The company exited the quarter with cash and cash equivalents of $63.9 million compared with $28.3 million in the previous quarter.
Fiscal 2017 Guidance
Kirkland’s anticipates fiscal 2017 earnings per share in the range of 50–65 cents. The company expects earnings to be lower in the first half of the fiscal year.
The company predicts sales to increase 6–8%. The guidance reflects the additional week in the retail calendar for fiscal 2017. This sales guidance assumes comparable store sales in the range of slightly negative to slightly positive excluding the impact of the additional week of sales.
The company intends to inaugurate 25 to 30 new stores and intends to close 20 stores in fiscal 2017. The company targets to achieve 2–3% square footage during the year.
The company expects to incur capital expenditures of approximately $23 million compared with $27 million in fiscal 2017, primarily driven by new store openings along with continued investments in omni-channel and supply chain initiatives.
How Have Estimates Been Moving Since Then?
It turns out, fresh estimates have trended downward during the past month. There has been one downward revision for the current quarter. In the past month, the consensus estimate also shifted downward by 206.7% due to these changes.
Kirkland's, Inc. Price and Consensus
Kirkland's, Inc. Price and Consensus | Kirkland's, Inc. Quote
VGM Scores
At this time, the Kirkland's stock has a strong Growth Score of 'A', though it is lagging a lot on the momentum front with an 'F'. However, the stock was allocated a grade of 'A' on the value side, putting it in the top quintile for this investment strategy.
Overall, the stock has an aggregate VGM Score of 'A'. If you aren't focused on one strategy, this score is the one you should be interested in.
Zacks' style scores indicate that the company's stock is suitable for value and growth investors.
Outlook
Estimates have been broadly trending downward for the stock. The magnitude of this revision also indicates a downward shift. It's no surprise shares that the stock has a Zacks Rank #4 (Sell). We are expecting a below average return from the stock in the next few months.